I think I disagree with Obama on this one:
The struggling auto industry was thrust into the middle of a political standoff between the White House and Democrats on Monday as President-elect Barack Obama urged President Bush in a meeting at the White House to support immediate emergency aid.
Mr. Bush indicated at the meeting that he might support some aid and a broader economic stimulus package if Mr. Obama and Congressional Democrats dropped their opposition to a free-trade agreement with Colombia, a measure for which Mr. Bush has long fought, people familiar with the discussion said.
The Bush administration, which has presided over a major intervention in the financial industry, has balked at allowing the automakers to tap into the $700 billion bailout fund, despite warnings last week that General Motors might not survive the year.
Mr. Obama and Congressional Democratic leaders say the bailout law authorizes the administration to extend assistance.
Why exactly should we extend more aid to the automakers? Didn’t we just throw them $25 billion? How much more could they possibly need, and why don’t we just buy the damned things and sell them to someone who can afford them and run them properly- they can not be worth that much anymore. or we could just let them fail.
This is not a damned surprise. They had years to re-tool and build vehicles that got better gas mileage, were more efficient, and used new technology, and instead they spent all their time building behemoths and paying lobbyists to fight higher CAFE standards. It was inevitable that once there was a gas crunch, they would get hammered. Why are we bailing out people who engaged in what was obviously bad business practices for years. Their focus on SUV’s was the business equivalent of malpractice, yet they did it anyway because that was where the quick bucks were.
Not to mention, I am curious how much of GM’s fortunes are tied to their financial services sector. In short, I simply do not understand sufficiently the upside and downside to letting these companies fail. Why should we bail them out. What is in it for us? And if we keep bailing everyone out who engages in bad business practices, where do we draw the line?